Given the strict quantity theory of money, if the quantity of money doubled, prices would
A) fall by half.
B) double.
C) remain constant.
D) increase somewhat but less than double.

Question

Quizplus · Accepted Answer

According to the quantity theory of money, if the quantity of money in circulation doubles, the price level will also double. This is because there will be twice as much money chasing the same amount of goods and services, leading to an increase in demand and therefore an increase in prices.

Given the Strict Quantity Theory of Money, If the Quantity